The practice of terminating a mediation or settlement agreement

             The Law of the Republic of Kazakhstan "On Mediation", adopted on 28.01.2011, entered into force on 05.08.2011. The concept of mediation in the law is defined as a procedure for resolving a dispute (conflict) between the parties with the assistance of a mediator (mediators) in order to achieve a mutually acceptable solution, implemented by the voluntary consent of the parties.

The agreement reached by the parties as a result of mediation is defined by law as an agreement on the settlement of a dispute (conflict).

The scope of mediation (in terms of civil law disputes) is disputes arising from civil, labor, family and other legal relations involving individuals and (or) legal entities, and relations arising during the execution of enforcement proceedings. The mediation procedure does not apply to these disputes when one of the parties is a government agency.

Also, if such disputes affect or may affect the interests of third parties who are not participating in the mediation procedure, and persons recognized by the court as legally incompetent or with limited legal capacity.

A dispute settlement agreement (mediation agreement) is concluded in writing and must contain information about the parties, the subject of the dispute, the mediator, as well as the obligations agreed upon by the parties, the terms, methods and deadlines for their fulfillment and the consequences of their non-fulfillment or improper fulfillment.

Based on the fact that mediation in dispute resolution can be applied both before going to court and after the start of the trial, mediation agreements can be distinguished depending on the moment of conclusion.:

- mediation agreements reached by the parties as a result of the mediation procedure conducted without referring the dispute to the court;

- mediation agreements reached by the parties as a result of the mediation procedure conducted after the dispute was referred to the court.

The Law on Mediation explicitly stipulates that a dispute settlement agreement concluded before a civil case is considered in court is a transaction aimed at establishing, changing or terminating the civil rights and obligations of the parties.

In case of non-fulfillment or improper fulfillment of such an agreement, the mediation party that violated the agreement is liable in accordance with the procedure provided for by the laws of the Republic of Kazakhstan. An agreement on dispute settlement reached by the parties during mediation in the course of civil proceedings is immediately sent to the judge in charge of the civil case and approved by the court in accordance with the procedure provided for by the Civil Procedure Code of the Republic of Kazakhstan, while the paid state fee is subject to refund to the payer in accordance with the procedure provided for by the Tax Code.

According to part 2 of Article 49 of the Civil Procedure Code, the court does not approve the parties' agreement on the settlement of a dispute (conflict) through mediation if these actions contradict the law or violate someone's rights, freedoms and legitimate interests.

Based on the stated provisions of the legislation, it appears that the mediation agreements reached by the parties as a result of the mediation procedure conducted without referring the dispute to the court may be amended or terminated in accordance with the provisions of Chapter 24 of the Civil Code.

By a court decision, the termination (amendment) of the dispute settlement agreement reached by the parties as a result of the mediation procedure conducted without referring the dispute to the court is carried out at the request of one of the parties to the agreement, in the cases provided for in Part 2 of Article 401 of the Civil Code.

Namely: in case of a significant violation of the contract (mediation agreement) by the other party; in other cases provided for by the Civil Code, other legislative acts or mediation agreement.

A violation of the terms of a mediation agreement by one of the parties is considered significant, which entails such damage to the other party that it is largely deprived of what it was entitled to expect when concluding a dispute settlement agreement.

Other cases provided for by legislative acts include violations of the rights, freedoms and legitimate interests of third parties.

A request to amend or terminate a mediation agreement may be submitted by a party to the court only after receiving the refusal of the other party to the proposal to amend or terminate the agreement, or failure to receive a response within the time period specified in the proposal, and in its absence - within thirty days.

The consequences of termination and modification of the mediation agreement are the same as in case of termination and modification of the contract (art. 403 of the Civil Code of the Republic of Kazakhstan).

It appears that the dispute settlement agreement reached by the parties during mediation in the course of civil proceedings and approved by the court cannot be terminated or amended in accordance with part 2 of Article 401 of the Civil Code (Chapter 24). Thus, an agreement on the settlement of a dispute reached by the parties during mediation in the course of civil proceedings is approved by a court ruling. At the same time, the court is obliged to check the compliance of the terms of the agreement with the norms of current legislation, and to find out whether the terms of the agreement violate the rights, freedoms and legitimate interests of third parties. Challenging a mediation agreement approved by a court ruling, in fact, entails a review of a judicial act that has entered into force by a court of the same instance during the consideration of a claim for termination of the mediation agreement.

Firstly, in accordance with article 21 of the Code of Civil Procedure, judicial acts that have entered into force are binding on all State bodies, local governments, public associations, other legal entities, officials and citizens, without exception, and are subject to strict enforcement throughout the territory of the Republic of Kazakhstan. Failure to execute judicial acts, as well as other manifestations of contempt of court, entail liability provided for by law.

The binding nature of a judicial act does not deprive interested persons who did not participate in the case of the opportunity to apply to the court for protection of violated or disputed rights, freedoms and legally protected interests. These persons have the right to file a complaint against the court's ruling to a higher court, or to apply to the court for a review of the judicial act approving the mediation agreement on newly discovered circumstances.

It should also be noted that the draft of the new Code of Civil Procedure stipulates that a mediation agreement not executed voluntarily, approved by the court, is subject to enforcement on the basis of a writ of execution issued by the court at the request of the person who concluded the agreement.

Secondly, in fact, the satisfaction of claims for the termination of the mediation agreement, approved by the court ruling, entails the resumption of the dispute between the parties, for which there is a judicial act that has entered into force. In accordance with the norms of the Civil Procedure Code, a court cannot consider a case if there is a court decision or court ruling on the termination of proceedings in connection with the plaintiff's rejection of the claim that has entered into legal force, passed on a dispute between the same parties, on the same subject and on the same grounds. a settlement agreement between the parties, an agreement on the settlement of a dispute (conflict) through mediation.

Thus, by the ruling of the judge of the Al-Farabiysky District Court of Shymkent dated 05.02.2014, A. G.'s statement of claim against the defendants I. B. and the mediator E. E. was refused to recognize the agreement on dispute settlement in the mediation procedure as invalid. According to the circumstances of the claim, by the ruling of the Alfarabiysky District Court dated 05/14/2013, the parties' agreement on the settlement of the dispute through mediation in the claim of I. B. R. to A. G. M. on recognition of the debt in the amount of 330,000 tenge was approved, and the civil proceedings were terminated. The court refused to accept the claim in accordance with subparagraph 1 of part 1 of Article 153 of the Civil Procedure Code of the Republic of Kazakhstan, as not subject to consideration and resolution in civil proceedings. At the same time, the plaintiff was given the right to appeal the court ruling of 05/14/2013. The court's conclusion seems to be correct, the invalidity of the dispute settlement agreement through mediation implies that the terms of the mediation agreement do not comply with legal norms. Whereas, in accordance with article 49 of the Code of Civil Procedure, the court does not approve the parties' agreement on the settlement of a dispute (conflict) through mediation if these actions contradict the law or violate someone's rights, freedoms and legitimate interests. Consequently, the issue of compliance of the terms of the mediation agreement with the law is resolved by the court upon approval of the mediation agreement.

By the ruling of the judge of the court No. 3 of the Oktyabrsky district of Karaganda dated 04/17/2014, the acceptance of the claim of S. I. V. to S. V. A. on forcing the enforcement of the dispute settlement agreement through mediation was refused. The claim was also refused due to the fact that the application is not subject to consideration and resolution in civil proceedings. The court legitimately pointed out that in this case mediation was conducted out of court, and therefore it is not possible to change the method of execution and turn the agreement into enforcement. It was clarified that the pre-trial settlement of the dispute between the parties has been exhausted, and the plaintiff has the right to apply to the court in a general manner with a claim for the division of jointly acquired property and the recovery of alimony for minor children.

Termination of the settlement agreement.

A settlement agreement reached by the parties during the consideration of a civil case and approved by the court may not be terminated or amended in accordance with part 2 of Article 401 of the Civil Code, for the reasons set out above, regarding the issue of termination of the mediation agreement reached by the parties during mediation during the civil process and approved by the court. These are: the binding nature of a judicial act that has entered into legal force for everyone, without exception, and their strict enforcement.; the right to enforce a settlement agreement on the basis of a writ of execution issued by the court at the request of the person who concluded the agreement; the right of interested persons who did not participate in the case to appeal the court's ruling on the approval of the settlement agreement to a higher court, or to apply to the court for a review of the judicial act on newly discovered circumstances; the impossibility of considering a case in civil proceedings, if there is a court ruling that has entered into legal force, issued in a dispute between the same parties, on the same subject and on the same grounds, to terminate the proceedings in connection with the approval of a settlement agreement between the parties.

The plaintiff, S. M.K., filed a lawsuit to terminate the settlement agreement concluded on 17.07.2013, arguing that the parties had not fulfilled the terms of the settlement agreement. Throughout the entire period, i.e. from 07/18/2013 to 12/01/2013, the defendant did not take any active action to sell the apartment, namely, there were no ads for the sale of the apartment in the media of the city and the region, which indicates a significant violation of the terms of the contract on the part of the defendant. The plaintiff, in turn, repeatedly posted written advertisements, but no buyers were found due to the excessively inflated sale price of the apartment. In court, the plaintiff supported the claims, the defendant U.V.I. acknowledged the claim. The court accepted the recognition of the claim, terminated the settlement agreement approved by the court on 17.07.2013, stating that it did not violate anyone's rights, freedoms and legitimate interests. At the same time, the court referred to the norm of part 1 of Article 401 of the Civil Code, stating that modification and termination of the contract are possible by agreement of the parties, unless otherwise provided by this Code, other legislative acts and the contract. And to part 2 of Article 401 of the Civil Code, which provides for the termination of the contract by the court at the request of one party in case of a significant violation of the contract by the other party. The legality of this decision is questionable. Failure by the defendant to comply with the terms of the settlement agreement, violation of the terms of the agreement, entails the plaintiff's right to enforce the court's ruling on the approval of the settlement agreement. If it was impossible to execute a judicial act during enforcement proceedings, in accordance with article 240 of the Code of Civil Procedure, at the request of the bailiff, the court that issued the ruling approving the settlement agreement was entitled to change the method and procedure for its execution. In addition, in accordance with the provisions of the Law "On Enforcement Proceedings and the Status of Bailiffs" during the enforcement proceedings, the parties were entitled to conclude a settlement agreement.

There is an opinion among legal scholars about the possibility of termination of the settlement agreement. At the same time, the settlement agreement is considered as a transaction that not only modifies, but replaces and terminates the entire range of legal relations between the parties, which are set out in the statement of claim. In this case, the functions of the court to approve the terms of the settlement agreement are regarded as certification of the transaction concluded between the parties to the civil procedure. However, in accordance with the current norms of the Civil Procedure Code, the court does not certify, but approves the terms of the settlement agreement, which must be reproduced in the operative part of the judicial act. Accordingly, the legal relations of the parties arising from the terms of the settlement agreement cannot be considered as a simple transaction. The court's approval of the terms of the settlement agreement makes it binding, entailing the right of the party to resort to enforcement in the event of non-fulfillment or violation of the terms of the settlement agreement by the other party.

Regulatory legal framework:

The Law of the Republic of Kazakhstan "On Mediation" dated 28.01.2011,

The Civil Procedure Code of the Republic of Kazakhstan,

The Civil Code of the Republic of Kazakhstan (Chapter 24).

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